In a recently created and income producing (millions of views!) youtube post, Veritasium founder Derek Muller accuses Facebook of FRAUD in a big way – and then goes about, in his “scientific” manner, explaining why and how this travesty occurs.

Derek should stick to straight science because his journey into marketing, advertising and data is nothing but clickbait (stuff designed to attract views). This makes it, IMHO, much more “fraudulent” than Facebook marketing as it is purposely designed by it’s originator to make as many dollars as possible while not giving any kind of a full story. I would say that Mr. Muller should be ashamed of himself, but since I would like to make as much money as he does over 1/2 truths and propaganda, I am more jealous than outraged. However, since my creed is the same as Derek professes (honesty, education, truth) let me do the less popular and less fruitful action and expose his propaganda for what it is…that is, IMHO it’s total BS.

Rather than bore you or amaze you with fast moving video and graphics – no, Derek, professional production does not equal truth – I’ll get to the heart of the matter quickly. The meat of this subject involves whether advertising, marketing, PR and promotion on Facebook is of a good value as compared to anything and everything else existing in the world. It’s NOT whether drinking an Ice Tea feels exactly like a splash in the pool or whether sleeping at a Holiday Inn Express makes you into a nuclear engineer!

Nor does it involve experiments as to whether low-IQ individuals who are purposely gaming the system can accomplish the “goal” of having people “like” them for money! It’s about REAL PRODUCTS, REAL BRANDS, REAL PEOPLE and REAL ORGANIZATIONS.

About Me

No long story here, but I’ve been buying and selling things since I was 15 years old – that’s over 45 years ago. I’ve done retail, wholesale, importing, manufacturing, inventing, web sites with millions of monthly visitors and more. In all these arenas, I’ve done a LOT of marketing and advertising….nuff said for now. If you like, you can see some of my work history here.
No, I’m not looking for any new business…. 🙂

Disputing the “Fraud” Myth

Rather than go point by point, let me send this one to the bottom of the sea where it belong using some simple parables and examples. The first one is from a historic figure – John Wanamaker – one of the most successful retailers in history! This one, by itself, pretty much destroys Mullers premise – but we will go on from there to completely annihilate it.

“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
John Wanamaker

This particular quote has often been modified to be closer to reality – such as “3/4 of my advertising is wasted…” or even “90% of my advertising is wasted…” and all are quite truthful…no FRAUD here. Mr. Wanamaker was obviously a marketing genius, so maybe he came in at 50% wasted. Mr. Muller, on the other hand, is pretending to be an ignoramus and showing us that anyone who has no idea of what they are doing may end up spending more money for the same results as a smarter marketer! Wow……stop the presses!

Let me give a couple real world examples of pre-internet advertising and marketing before we get to the Facebook specific data and experiences.

1. Newspaper and Print advertising – Pre-internet we did normal advertising in both local and regional papers. A small ad in a local paper might have cost $400 for one showing (in a weekly), while a small ad in the regional sunday paper would cost $2000+. We did this as well as radio, coupons, direct mail, trade shows and much more for decades. If we placed a $400 ad and we had two phone calls to the store and one person stop in and mention the ad, we’d have thought it was the best ad we ever ran! In other words, it cost us over $100 in 1990 money (over $200 today) for a single “like” or actual action. Compare that with Muller complaining about 25 cents for a like…..which would be about 12 cents back then! As far as the FRAUD – we always knew that all advertising was priced so high as to be not worth the money….but, the alternative was an unknown…so we spent a certain percentage on advertising.

As far as the FRAUD – if I were to use the Veritasium definition, the Philadelphia Inquirer and many other publications certainly were perps of the like. When they sold us a $2000 small ad in the Sunday paper, they claimed they had 2.2 million readers. Upon further analysis, we found they only printed 500,000 papers, but claimed each was read by over 4 people (total BS, of course!). Now, to take it one step further, our ad may have been on the second page of the Sports Section – in a paper with hundreds of pages. It’s doubtful that even 100,000 people glanced at that particular page….massive fraud, right? Well….actually, any marketer worth his salt knows stuff like this. Apparently, physicists and scientists less so…..which is understandable. That’s why we live in the age of specialization.

2. Radio and TV Advertising – Without giving you a long story, Radio and TV ads are subject to all of the same “FRAUD” in many many ways. You better believe most of your money is going to sales commissions and high paid executives…and the stats they give you are designed to snow you into thinking a crowd is going to beat down your door after your ads air. Suffice it to say that in many years of advertising in both, we never saw any return even worth a discussion.

3. Direct Mail and Coupon Clippers, etc. – Again, these were often sold to us Fraudulently – claims of how many were distributed were obviously bunk….as they failed to mention how many got wet outside when it rained or snowed or that the majority of them were thrown away before even being given a cursory look. FRAUD.

4. Yellow Pages – This one could fill a book. The Yellow Pages, that multi-billion dollar bastion of marketing during a 60+ year period – was pimped by salespeople who often made north of 100K per year (in the 1980’s). These folks were slick – but high pressure. Science…of the psychological type…was used to lure companies to place untold amounts of advertising, most of which did very little good when compared to the cost. FRAUD.

And so we are starting to get close to the Veritasium and Derek Muller new definition of the word. Apparently it now means “I’m so clueless in my profession that I really believe everything I read and hear in the commercial space, and therefore subject to paying for value that I don’t get”.

AND, if that is the definition, I’d say 99% of commercial enterprises, as well as educational orgs, non-profits and even medical establishments are 100% guilty of FRAUD.

Facebook Value – Some Data and Dicussion

Book could be written on this subject, but let’s do some rules of thumb and common sense thinking and comparison. Derek has already proven that if you act like an idiot, create nothing and then try to get people to heavily engage for 25 cents apiece, you are unlikely to have great success! I surely hope he’s not on Elon Musk’s rocket or car making teams…if so, please inform me and I’ll sell my stock!

Instead of acting Dumb and Dumber, let’s pretend Derek was actually trying to obtain value for his money and both “likes” and, more importantly, READS, CLICKS, SHARES and other actions which would help his brand. This is the daily reality for online marketers. In this regard, let me share some recent data from a experimental blog and brand project I started in 2013. This is a web site devoted to beginners in the hobby of Quadcopters and Drones. I blogged extensively on the starting of this new site…as it was done largely as a demo of whether…or not it was still possible to create a successful web site from scratch.

The site is at Droneflyers.com and the Facebook Page is at:
https://www.facebook.com/droneflyers

Let me give a quick run through of the way Facebook will let me – notice…I said LET ME, in that it’s totally optional for me to even spend a dime! Facebook, even for zero dollars, is giving me a vast number of services and a valuable platform.

1. Get more Page Likes and More Page Traffic – This is probably the particular selection Mr. Mullers is pointing to. A screen shot is below:

This promo type is about much more than getting likes! It allows for me to promote my brand name, a picture, a description AND a clickable link to my Facebook Page…as well as the simple “Like” button. Very few marketers are going to enter into this for just “likes”, but will get the whole pages consisting of tens of thousands (or more) of targeted impressions with an audience that can be targeted very closely. Careful targeting and some basic study of the results can cull out 90% of any trickery from fake or false accounts. The ability to spend as little as $5 or less on a trial run also means the advertiser, unlike most other ad options, can run very low cost experiments.
So who might use this? Well, maybe the Red Cross, the American Lung Association and thousands of other orgs who wish to raise their hands and say “We are here on Facebook”.

2. Promote Website – this is yet another option available, used to promote a web site which is NOT on Facebook…so in my case, it would promote droneflyers.com. Here is the screen shot of the form for this:

No fraud here! In fact, not only are you allowed to carefully target the people you advertise to (try that with other marketing!), but Facebook tells you approx. how many actions (clicks to your web site) you might expect per day! Note that this sample gives a range, if I spent $20 a day, of 78-156 people sent to my site daily. Taking a middle figure of 120, the cost to me for each new visitor Facebook will send to my site is 20/120 or about 17 cents. Remember the figures given for offline advertising…one Fortune 500 Company consumer products company told me (pre-internet) their cost per lead was $36. Given that, how’s 17 cents stack up.
Can I kiss Facebook on the lips?

3. Boost Post – No, the party isn’t over yet – the best is yet to come! Boost Post is a tool which allows me to promote an individual post….which contains a picture, a call to action (text) and a link to my website. This is manna from marketing heaven! Once again, I get to call the shots and detail the audience I want to receive the message.

The above shows actual stats from a small ad run of approx. $100 US. For that price – less than the cost of a tiny newspaper ad in a small town weekly – I got 1567 Clicks on the link – so those were about 7 cents apiece. I also got a bunch of page and post likes and 34 Shares…to say nothing of the 26,000+ impression (views) which I also received. These statistics then show up on the statistics kept on my Droneflyers.com site – for example, Facebook sent approx. 450 visitors to my site yesterday alone, many of them completely free! They are not charging me anything for the people who visit my page/site from the shares and/or who happen to follow the page or otherwise find it.

Summary:
Are there rodent droppings and insect pieces in Breakfast Cereal?
Almost certainly there are. It stands to reason if Derek or I could create a professional video about those and get a couple million views (and the corresponding income from google), we’d do it in a heartbeat!

Are there scary dust mites of all types in our houses, clothes, bedding, etc.?
Again, almost certainly yes. The housecleaning service which “cleaned” Dereks’ house or hotel room is most certainly guilty of fraud 🙂
After all, it’s not “clean” if dust mites were left there!

I have to assume most readers get my point. There are really multiple points here – the most important which can be expressed in this way…

1. A fool and their money are easily parted – and PT Barnum was right (sucker born every minute).

2. Derek Muller and many others make vast sums of money from clickbait and sensationalism, while claiming to promote “truth and honesty” as if they are the ones who are not corrupted by money, fame, power or influence. At the same time, they rely on the platforms they complain about to accomplish their goals.

3. Online advertising and marketing is by far the best value EVER in the marketing and advertising and PR world – levels of magnitude above the offline world. Companies such as google and facebook are delivering a never-before-seen level of value to the advertising AND to the small business and publishers.

I don’t want to leave you, however, without addressing one of them major points of Mr. Mueller’s claims – that is, that the giant BAD BAD corporations such as Facebook and Google are intentionally perpetrating fraud on their customers en masse…and could fix everything in a New York minute is they do desired.

This again fits the definition of propaganda:
“Propaganda is information that is not impartial and used primarily to influence an audience and further an agenda, often by presenting facts selectively “

Notice that propaganda is not always a lie – in fact, the best examples are as above “presenting facts selectively”. That’s what Veritasium does, especially when it comes to their “conclusions”. Here is what I consider the real story.

In any venture – especially in those which are fast growing and delving into the great unknown – many of the policies and actions of management are continually in flux and done in a reactionary manner. In plain english, it’s impossible to imagine both the potential problems and depth of human ingenuity when it comes to gaming systems. When google started with the Pay Per Click advertising, there was massive fraud….but it could not close many of the loopholes until it had the experience and data to do so. This stuff IS rocket science! While click fraud, “likes” fraud and other such things may look obvious in the rear view mirror, executives just don’t sit around thinking of all the ways that poor folks in Bengladesh are going to abuse their services. Rather, they have to wait until some of it happens and then slowly adjust their systems to avoid abuse….without screwing up other parts of their giant hairballs (and Facebook is a giant hairball).

I truly believe the above paragraph is the Big Picture story. However, if pushed I will readily admit that I think some of these larger companies are slow and measured in the speed of their responses to those taking advantage…whether or not that is fraudulent is for the lawyers Muller may hire if he decides to pursue a class action!

Years ago, Google allowed many fraudulent (not illegal, but bogus) sites to display their advertising – and google made a LOT of money, probably hundreds of millions, from those advertisements. As an honest content creator, I felt that this was unfair…because these sites were taking (and getting paid for) ads which should have been showing on my site.

Over the years – MANY YEARS – google eliminated (down rated) these scraper and fake sites. Could they have done it quicker? And did they hesitate to do it too quickly due to the large revenue hit they may have taken? Well, you’d have to depose those goog execs in the know to find that out. I suspect the truth lies somewhere in-between. They could have declared an all-out emergency and put all available resources into stopping the fraud, but they had other fires to put out at the same time…so they did it as they updated the entire search engine. Facebook also has a lot to do and constantly upgrades their ad and promo systems to allow for more efficient spending and reporting.

It’s up to the reader and the lawyers to determine whether or not they feel that crosses any line. While Veritasium and Derek Muller ponder that decision, I’m going to boost more posts and load up on some Facebook stock. Gotta go! Thanks!